Regression Analysis: Sales versus Price, Promotion The regression equation is Sa

Question

Regression Analysis: Sales versus Price, Promotion The regression equation is Sales = 12.9 - 6.50 Price + 0.0207 Promotion Predictor Coef SE Coef T P VIF Constant 12.8638 0.2425 53.05 0.000 Price -6.4979 0.3575 -18.18 0.000 1.159 Promotion 0.02069 0.03811 0.54 0.611 1.159 S = 0.156325 R-Sq = 98.7% R-Sq(adj) = 98.2% For the above multiple regression model--- Select one: Collinearity is not a problem because R-Sq(adj) = 98.2% Collinearity is a problem because R-Sq(adj) = 98.2% Collinearity is not a problem because VIF

Explanation / Answer

The correct answer is option c. Collinearity is not a problem because VIF < 5

Becuase In our case, VIF with values around 1, we are in good shape"

You can interpret VIF values on a scale: 1 is not correlated,

1 to 5 is moderately correlated, and 5-10 is starting to show strong correlation.

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.